Monday, 22 July 2019

Hugging A Debtor: County Court Judgments

The government’s recently announced 60 day ‘breathing space’ scheme to protect debtors who are individuals is planned to rear its head in legislation to be put before parliament later this year with implementation in early 2020. But don't hold your breath. They tell me that anything could happen Westminster way between now and then.

But there's good news for debtors NOW which might conceivably bring on some creditor cursing. When the creditor has a county court judgment for less than £5,000 they can send in the county court bailiff to the debtor. They do this by applying to the court for a warrant of control. Centres called - wait for it - warrant of control centres - are being established in 12 locations in England and Wales by the Courts Service. Some of these centres are already functioning. All warrants of control will be referred to the centre servicing the relevant patch rather than immediately to a bailiff. The centre will then make contact with the debtor and attempt to engage with them with a view to arranging a pay up, probably by instalments, and offering support when it is needed. This will last for up to around 12 days. If the debtor has paid up or come to an arrangement to pay with the creditor then it should be unnecessary for the bailiff to be involved.

The Courts Service reckons that the scheme is working well. If it helps debtors or creditors or both, all well and good. If it means that the scheme gives the debtor an opportunity to get rid of of their Roller or fifth television set before it can be seized by the bailiff, then not so good - for the creditor. It is always open to the creditor who has no faith in the debtor playing ball to attempt to stop the warrant being referred to one of these centres by making an application to the court for the warrant to go straight to the bailiff and for the debtor not to be given prior notice of the bailiff's intention to call on them.

A creditor can have the judgment referred to the High Court and a writ of  control issued there which would be dealt with by an enforcement agent who is the High Court's version of a bailiff. This can only be done if the judgment is for at least £600. Disadvantages? The enforcement agent's charges ultimately payable by the debtor are higher than the charges involved in using a county court bailiff and will take priority over the debt. This means that if the debtor has only very limited assets then there may be nothing left for the creditor. The arguable advantages? A control centre will be avoided and interest on the judgment at the rate of 8% will be attracted as from when the case goes to the High Court until the debtor gets their money.

There are loadsatips for debtors and creditors about how the law can help them in my book Breaking Law.  Be careful though, debtors, to hide it under the bed. Otherwise, the bailiff or enforcement agent might seize it!